The Reinvention of HR

The February 2014 issue of “Boss” contained an article which caught my eye. It was all about the “Reinvention of HR” within Netflix. The “Boss” piece was based on a Harvard Business Review article by Patty McCord (published in their January-February 2014 issue)

As with a deal of American management literature, I came away with mixed feelings. Numbers of books and articles like this one come with (or cause in me) faint apprehensions about hyperbole and don’t necessarily take account of practical realities.

However on the other hand, some material, and certainly this article and slide pack – does resonate with and challenge this particular long-time HR Director.

According to the author, Netflix has turned more than a few conventional HR wisdoms on their heads. (She did have the advantage of working in an initially small organisation.) Gone are formal performance appraisal systems (big cheer from me), annual leave is what each individual thinks he or she needs, what can be put on expense claims is a matter of good (and sometimes counselled) judgement rather than being prescribed, employees are encouraged to do their own salary surveys – and then comes their talent policy.

In a nutshell, talent development and continuing alignment with business needs in Netflix rests on quite quickly identifying those not able to contribute at a high level and presenting them with generous retrenchment terms. Then hiring someone better fitted to the new sets of needs.

Gone are protracted performance improvement processes. In each instance, a lack of alignment with business needs is identified, and the individual is quickly packaged out. (Do they get assistance with a next career, or simply a pot of money, I found myself asking?)

Few of us have walked into businesses as a new HR Director without a long past legacy, built on past experience. And none of us can ignore Fair Work and other conventions and common law judgements about employment standards. However, on the other hand, we do tend to work up “processes” to achieve consistency and so-called fairness, well beyond the needs of well-trained, mature managers and supervisors. It would be great fun to join a start up with a blank canvas in relation to HR policies and processes.

Patty McCord got me thinking about what an HR Director might achieve by removing selected rules and policies steadily over a period, rather than adding more as time moves along.